Nikkei climbs to 1-1/2 week high; Nissan, Sony shine

Tue Feb 11, 2014 9:36pm EST

* Nissan soars as investors cover short positions - traders
    * Sony rises on Apple supply report
    * Weak machinery orders data limit overall gains - analysts

    By Ayai Tomisawa
    TOKYO, Feb 12 (Reuters) - Japan's Nikkei share average
climbed to a 1-1/2 week high on Wednesday after the Federal
Reserve's new chief held off from making any changes to its
stimulus-reduction schedule and as a softer yen supported
exporters like Canon Inc.
    Nissan Motor Co outperformed with traders citing
short-covering after the carmaker reported earnings on Monday,
while Sony Corp gained on a report that it is in talks
to supply more camera sensors to Apple Inc.
    Analysts said the Nikkei could have risen higher but a slide
in Japanese machinery orders somewhat weighed on investor
sentiment.
    The Nikkei was up 0.5 percent at 14,796.95 in
midmorning trade after touching 14,861.63, its highest since
Jan. 31. It moved further away from a four-month low of
13,995.86 hit last week. Japanese markets were closed on Tuesday
for a national holiday.    
    Data on Monday showed that machinery orders, a leading
indicator of capital expenditure, tumbled a much
steeper-than-expected 15.7 percent in December. 
    Still, investors were relived that Fed Chair Janet Yellen,
in her first testimony to Congress, emphasised continuity in the
central bank's policy strategy of cutting asset purchases by $10
billion a month. 
    "One big reason why the Japanese market fell sharply last
week was concern that the Fed may continue tapering amid a weak
economy," said Masayuki Kubota, chief strategist at Rakuten
Securities, adding that the market is relieved Yellen seems to
have calmed such concerns by not offering any surprises.
    The Topix gained 1.3 percent to 1,219.41.
    Nissan jumped 3.6 percent to a two-week high of 917 yen,
even after the carmaker reported quarterly operating profit that
missed analysts' estimates and a low operating profit margin.
 
    Traders said that investors who had shorted the stock when
Nissan slashed its annual profit outlook in November appeared to
have started covering their short positions.
    "The company startled the market last fall, so those who
were expecting even worse news at this earnings release were
relieved that there was no such negative surprise," said a fund
manager at a Japanese asset management firm.
    Sony gained 2.2 percent and was the eighth most-traded stock
by turnover. The Nikkei newspaper said Sony is in talks with
Apple to double its supply of camera components for a new iPhone
slated to roll out as early as next year.
    Exporters were generally higher as the dollar edged up to a
1-1/2 week high of 102.71 yen.
    Canon added 1.5 percent and Panasonic Corp added
1.7 percent.
    The JPX-Nikkei Index 400, an index launched this
year comprised of firms with high return on equity and strong
corporate governance, rose 1.3 percent to 11,019.74.